Chapter 11 Review
Quiz by Oliver Khamky
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38 questions
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- Q12. A monopolistically competitive industry is like a purely competitive industry in that:B. Nonprice competition is a feature in both industriesC. Neither industry has significant barriers to entryA. Each industry produces a standardized productD. Firms in both industries face a horizontal demand curve30s
- Q24. Monopolistic competition is characterized by firms:C. Producing at optimal productive efficiencyB. Making economic profits in the long runD. Producing where price equals marginal costA. Producing differentiated products30s
- Q36. One difference between monopolistic competition and pure competition is that:A. Products may be homogeneous in monopolistic competitionB. There is some control over price in monopolistic competitionD. Firms differentiate their products in pure competitionC. Monopolistic competition has significant barriers to entry30s
- Q48. Which set of characteristics below best describes the basic features of monopolistic competition?D. Easy entry, few firms, and standardized productsB. Barriers to entry, few firms, and differentiated productsA. Easy entry, many firms, and standardized productsC. Easy entry, many firms, and differentiated products30s
- Q59. The goal of product differentiation and advertising in monopolistic competition is to make:C. Price less of a factor and product differences more of a factor in consumer purchasesA. The firm allocatively efficient even if it is not productively efficientB. The firm productively efficient even if it is not allocatively efficientD. Price more of a factor and product differences less of a factor in consumer purchases30s
- Q611. Which industry would be most probably monopolistically competitive?C. Web design consultingD. Electric-car manufacturingA. HD TV makingB. Electric light bulbs manufacturing30s
- Q713. The following are the respective numbers for the four-firm concentration ratio and Herfindahl index in an industry. Which set of numbers would suggest that the industry was monopolistically competitive?D. 89 and 2582C. 1805 and 80A. 25 and 207B. 76 and 266230s
- Q816. Demand and marginal revenue curves are downsloping for monopolistically competitive firms because:C. There are a few large firms in the industry and they each act as a monopolistA. Each firm has to take the market price as givenD. Mutual interdependence among all firms in the industry leads to collusionB. Product differentiation allows each firm some degree of monopoly power30s
- Q921. A monopolistically competitive firm is producing at an output level in the short run where average total cost is $4.50, price is $4.00, marginal revenue is $2.50, and marginal cost is $2.50. This firm is operating:B. With a loss in the short runC. At the break-even level of output in the short runD. At an efficient level of output in the short runA. With a profit in the short run30s
- Q1032. Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will:C. Cause firms to standardize their product to limit the degree of competitionD. Make the industry allocatively efficient as each firm seeks to maintain its profitsB. Attract other firms to enter the industry, causing the firm's profits to shrinkA. Reduce the excess capacity in the industry as firms expand production30s
- Q1159. Monopolistic competition is characterized by excess capacity because:D. The demand for a product is perfectly elastic (horizontal) in this type of industryC. Firms produce at an output level less than the least-cost outputA. Firms are always profitable in the long runB. Firms charge a price that is greater than marginal cost30s
- Q1263. Monopolistic competitive firms are productively inefficient because production occurs where:A. Marginal cost is greater than marginal revenueB. Marginal cost is less than marginal revenueD. Average total cost is less than the difference between average total cost and average variable costC. Average total cost is greater than the minimum average total cost30s
- Q1365. Compared to pure competition, monopolistic competition:C. Provides greater product differentiation and achieves greater productive efficiencyD. Offers less product differentiation and lower productive efficiencyB. Offers less product differentiation but attains equal productive efficiencyA. Provides greater product differentiation at the cost of some excess capacity30s
- Q1468. The variety of products and features which consumers may choose from in monopolistically competitive industries:D. Makes the demand curves facing firms in these industries more elasticC. Guarantees that firms produce at full-capacity output levelsB. Leads to an optimal allocation of resources in the market structureA. At least partially offsets the economic inefficiencies of this market structure30s
- Q1570. In monopolistic competition, product differentiation and variety tends to:B. Raise costs and decrease demand for the firm's productC. Lower costs and increase demand for the firm's productD. Lower costs and decrease demand for the firm's productA. Raise costs and increase demand for the firm's product30s